Business Ethics
Sustainability
Relates specifically to the environment (air, land, and water).
Individual Factors
Research regarding individual factors that affect ethical awareness,judgment, intent and behavior include gender, education andnationality.
True
TRUE or FALSE: An ethical culture is based upon the norms and values of the company.
True
TRUE or FALSE: Business ethics contributes to investor loyalty.
Omission Lying
intentionally not informing about problems, safety warnings, negative issue)
Corporate social responsibility
Actions associated by firms with various stakeholder interests as a priority (other than investors).
Normative Descriptive Instrumental
Approaches to stakeholder theory:
Employee Commitment
Ethics Contributes to __________ • Willingness to sacrifice for the organization. (OTY) • Increases group creativity and job satisfaction; decreases turnover. • Less pressure to compromise ethical standards, • Greater absence of misconduct. • Strong community involvement increases loyalty and positive self identity.• The more a company is dedicated to taking care of its employees (ethics), the more likely is that the employees will take care of the organization.
Employee Commitment Investor loyalty Customer Satisfaction Profits
Ethics contributes to:
Integrity Honesty Fairness
Foundational Values for Identifying Ethical Issues
Normative
Identifies ethical guidelines that dictate how firms should treat stakeholders. Principles and values provide direction for normative decisions.
Values
Enduring beliefs and ideals that are socially enforced (trust and integrity, accountability).
Ethical awareness
The ability to perceive whether a situation or decision has an ethical dimension.
Ethical issue intensity
The relevance or importance of an event or decision in the eyes of the individual, work group, and/or organization
Commission Lying
creating a perception by words that intentionally deceive the receiver of the message;
Ethical issues
involve a situation, a problem, or even an opportunitythat requires introspection (thought), discussion and investigationbefore a decision can be made.
two-way street.
relationship between companies and their stakeholders is a _________
organizational misconduct
relationships are not only associated with organizational success but also in ________
Corporate Intelligence Related
(Hacking)
Misuse of Company Time and Resources
(Using company computer software and Internet services for personal business)
Sexual Harassment
(any repeated, unwanted behavior of a sexual nature perpetrated upon one individual by another)
Intellectual Property Rights
(music, books, movies; digital theft; copyright infringement)
Bribery
(offering something (usually money) in order to gain an illicit advantage)
Abusive or Intimidating Behavior
(physical threats, false accusations, profanity, insults, yelling, harshness, being annoying)
Discrimination
(race, color, religion, sex, marital status, age, disability)
Relationships Building effective relationships is considered one of the more important areas of business today A business exists because of relationships among employees, customers, shareholders or investors, suppliers and managers who develop strategies to attain success.
Business ethics issues, conflicts, and success revolve around:
organizational relationships
Businesses exist because of __________ between employees, customers, shareholders, and the community.
junzi
Confucius defined an honest person as ____
Instrumental
Describes what happens if firms behave in a particular way. This approach is useful because it examines relationships involved in the management of stakeholders including the processes, structures, and practices that implement stakeholder relationships within an organization.
individual's personal moral philosophies and values organization's and society's values and culture
Ethical issues typically arise because of conflicts among ________________, the _______________ in which they work, and those of the __________in which they live.
Profits
Ethics Contributes to _________ • Better business performance. • Part of strategic planning toward obtaining the outcome of higher profitability. • Business ethics is becoming more than just a function of compliance; It's becoming an integral part of management's efforts to achieve competitive advantage.
Investor Loyalty
Ethics Contributes to ___________ • Provides a foundation for efficiency, productivity, and profits. • Negative publicity, lawsuits, and fines can lower stock prices, diminish customer loyalty, and threaten a company's long-term viability. • Demand for socially responsible investing is increasing. • Ethical conduct results in investor loyalty and can contribute to success that supports even broader social causes and concerns.
Customer Satisfaction
Ethics Contributes to ______________ • High levels of perceived corporate misconduct decreases customer trust. • Companies viewed as socially responsible increase customer trust and satisfaction. • Consumer respondents stated they would pay more for products from companies that give back to society in a socially responsible and sustainable manner. • When an organization has a strong ethical environment, it usually focuses on the core value of placing customer's interests first.
Organizational Factors
In the workplace, the organization's values often have greater influence on decisions than a person's own values.
Moral intensity
Individuals' perceptions of social pressure and the harm they believe their decisions will have on others.
conflicts
Most ethical issues exist because of __________ about what is right and wrong among and within stakeholder groups.
Ethical culture
Organizational principles, values, and norms that are adhered to by the company and its personnel.
Business ethics
Organizational principles, values, and norms that may originate from individuals, organizational statements, or from the legal system that primarily guide individual and group behavior in business.
Morals
Personal philosophies that define right and wrong.•
Morals
Personal principles rarely change
Honesty
Truthfulness or trustworthiness. To tell the truth to the best of your knowledge without hiding anything.
Value dilemma
Two or more beliefs/ideals in conflict with one another.
Moral dilemma
Two or more morals in conflict with one another.
Primary and secondary stakeholders
Two types of stakeholders
• Identify ethical issues. • Recognize approaches for resolving ethical issues. • Cope with conflicts between your own personal values and those of the organization in which you work. • Gain knowledge to make more ethical business decisions.
Why Study Business Ethics?
Opportunity
describes the conditions in an organization that limit or permit ethical or unethical behavior.• The ________- that employees have for unethical behavior in an organization can be eliminated through formal codes, policies, and rules that are adequately enforced by management
Ethics
eternal rules; may vary between environments
Stakeholder framework
identifies the internal stakeholders (board of directors, managers and employees) and the external stakeholders (customers, special interest groups and regulators) who agree, collaborate, and engage in confrontations on ethical issues.
Insider Trading
illegal practice of trading on the stock exchange to one's own advantage through having access to confidential information)
Integrity
is one of the most important and often-cited terms regarding virtue. It refers to being whole, sound, and in an unimpaired condition. Integrity relates to product quality, open communication, transparency, and relationships.
Fairness
is the quality of being Just, equitable, and impartial.
Equality
it is about how wealth or income is distributed among employees within a company, a country, or across the globe.
Section 404 of U.S. Sarbanes-Oxley Act of 2002
mandates that all publicly traded companies must establish internal controls and procedures for financial reporting and must document, test, and maintain those controls
ethical issue awareness.
the FIRST STEP toward understanding business ethics is to develop ________
Fraud
(Any purposeful communication that deceives, manipulates, or conceals facts in order to create a false impression)
generalizations
Although it is impossible to describe exactly how any one individual or group might make ethical decisions, there are ____________ about typical behavior patterns within organizations.
Firm survival Profitability, revenues, sales Stakeholders: customers, employees, channel members (manufacturers, wholesalers, retailers) Contribute to societal goals: community, country, world
Business ethics help:
Descriptive
Focuses on the firm's behavior; addresses how decisions are made for stakeholder relationships.
stakeholders
Government agencies, communities, and many others who have a "stake" or claim in some aspect of a company's products, operations, markets, industry, and outcomes are known as ______
Principles
Specific boundaries for behavior that often become the basis for rules (human rights, freedom of speech).
True- That stems from the basic definition
TRUE or FALSE: Business ethics deals with right or wrong behavior within a particular organization.
False - focuses on organizational concerns (legal and ethical - employees, customers, suppliers and society
TRUE or FALSE: Business ethics focuses mostly on personal ethical issues
False
TRUE or FALSE: Investments in business ethics do not support the bottom line
False
TRUE or FALSE: The trend is away from cultural or ethically based initiatives to legal initiatives in organizations
U.S. Sarbanes-Oxley Act of 2002
The ___________- was passed by the U.S. Congress to protect investors from the possibility of fraudulent accounting activities by corporations. Every organization is required to use a recognized internal controls framework for its ________ program.
Reciprocity
This occurs when an action that has an effect upon another is reciprocated with an action that has an approximately equal effect upon another. _______ is the return of small favors that are approximately equal in value.
Secondary stakeholders
Those who are not typically engaged directly in transactions with a company and are therefore not essential to its survival (government agencies and communities).
Primary stakeholders
Those whose continued association and resources are absolutely necessary for a firm's survival (customers, shareholders, employees, suppliers).
1. Equality 2. Reciprocity 3. Optimization
Three fundamental elements that motivate people to be fair:
one must first understand how individuals make ethical decisions in an organizational environment.
To improve ethical decision making in business,_________
Optimization
Trade-off between equity (equality) and efficiency(maximum productivity).